Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.
What's the opposite of the famous market phrase"don't catch the falling knife?" That's the current state of the ether market, where prices are exhibiting the strongest upward momentum in three years.More importantly, the second-largest cryptocurrency's momentum indicator, which measures the rate of change in prices over 10 days, has jumped to $880, the highest since May 2021, according to charting platform TradingView.
In other words, the bullish trend is strong; bears looking to sell, if there are any, could easily be run over. It also means that picking a top right now is as risky as attempting to pick a bottom – catching that falling knife – when an asset is experiencing a strong decline. Traders use the momentum indicator to confirm market trends and spot divergences. A bearish divergence occurs when the indicator decouples from rising prices, hinting at bullish exhaustion and potential correction, or drop.As of writing, ether's daily price chart shows the momentum indicator rising along with the price, confirming the uptrend.
The 14-day RSI has crossed above 70, which is also a sign of strengthening bullish momentum. The indicator oscillates between 0 and 100. Readings above 70 indicate a strong upward momentum, not as popularly perceived, overbought conditions . Readings below 30 show an acceleration in price sell-off. The immediate resistance is seen at $4,090, the high hit in April, followed by the record price of $4,692 reached during the bull run of 2021. Options traders from the decentralized marketplace Lyrain a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence.
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